75 Green Businesses You Can Start to Make Money and Make a Difference. Glenn Croston
In the race to produce biofuels, production of corn ethanol consumed about a third of the corn grown in the United States in 2007 and displaced about 5 percent of the gasoline used (The Economist, December 6, 2007, also, Energy Information Administration). The U.S. government has set a target of reducing anticipated gasoline use by 20 percent by the year 2017 and 30 percent by 2030, an aggressive goal that creates a huge opportunity, but corn ethanol alone is not going to get us there. The price of corn already has doubled as a result of competition between fuel and food, raising food prices and stirring global protests. Producing more biofuel requires other solutions, and the big money is betting on cellulosic ethanol, which is produced by converting the cellulose in plants into ethanol. Entrepreneurs who can make the cost of cellulosic ethanol production competitive with other fuels will realize an even larger opportunity than corn ethanol.
Fermenting corn for ethanol uses only the corn itself; microbes convert the starch in corn into ethanol, like wheat is fermented to make beer or grapes for wine. This leaves the stalks, stems, and cobs made of cellulose behind. Cellulose is the most abundant biomolecule on our planet, but although it’s made of sugar, most animals cannot digest it. Cellulose-eaters, such as cows and termites, rely on microbes to break down the cellulose into useable sugars. Whoever finds a clean and economical way to unlock the energy of cellulose will fuel the next biofuel revolution.
The Department of Energy, other parts of the U.S. government, and additional groups too numerous to list are funding cellulosic ethanol research. Researchers are looking at every step in the process: growing the plants, harvesting them, breaking up the plant material, breaking down the cellulose into sugar, and converting it into ethanol. All of this can already be done but needs to be done better to produce cellulosic ethanol cheaply enough to compete with gasoline. Companies like Novozyme of Denmark are making enzymes that can break down cellulose. Startups like Mascoma and Verenium, both in Massachusetts, are looking for new enzymes that release the sugar from cellulose. Pilot plants for industrial production of cellulosic ethanol already have been built by companies like Iogen of Ottawa, Canada, and more pilot plants are on the way. We know we can make ethanol and use it as fuel. The only question is whether we can do it cheaply enough to compete with other fuels and in a way that makes sense for the environment.
There is not one business opportunity in cellulosic ethanol but many. Corn-based ethanol is paving the way for cellulosic ethanol in many ways, but there isn’t a system yet for harvesting and collecting the material that would be used to make the new fuel. For example, if switchgrass, a perennial, is a solution, then farmers will need new ways of harvesting it, and businesses will need to collect the material and transport it. What other material can be used to produce cellulosic ethanol? Potentially, every different crop will require different processing and a variation on getting sugar and ethanol out of the plant material. Growing different crops for fuel creates unique opportunities wherever you live.
RELATED TREND
A related opportunity is for companies to find creative uses for coproducts. For example, if waste heat is produced, it should be captured. Compounds called lignins, which are released from cellulose, might have their own use. Companies such as Lignol Innovations in Canada already are starting to look at these opportunities.
Today, most ethanol is produced and sold in the Midwest and in states such as California that have mandated that ethanol be mixed with other fuels. To reach the U.S. government goals set for 2017 and beyond, production needs to increase from between 5 and 6 billion gallons to 20 and 30 billion gallons in less than a decade. Regional producers across the country are producing corn ethanol, and if cellulosic ethanol is perfected, there will be massive expansion of this market.
RELATED TREND
With so many small companies getting involved in ethanol production, and a lot of money being invested, consolidation is expected to occur along the road to commercialization. Driven by the pressure for more research and to produce a cheap commodity, opportunities for mergers, acquisitions, and partnerships will spring up.
Starting a business in ethanol production sees stiff competition, significant research investment, and no immediate payoff. However, the opportunities are not just for fuel production but exist at every step in the supply chain, including distribution and storage. Ethanol is corrosive and absorbs water from the air, making corrosion worse. The more ethanol takes off as a fuel, the more we need better ways of moving and storing it.
The glut in ethanol that depressed prices in 2007 was not because of excess ethanol production, but because production exceeded the distribution capacity to move the ethanol from the Midwest to other parts of the country (New York Times, September 24, 2007). With billions of gallons of ethanol being produced and far more planned, eco-entrepreneurs developing innovative ways of handling and distributing ethanol will find ready opportunities. Today, ethanol is distributed by rail and truck, although it would be more efficient to transport via pipelines. Finding a way to build pipelines that can handle ethanol is one option. Another is distributing the biomass to regional fermentation facilities where ethanol can be produced.
IN THE LONG RUN
While ethanol has several important factors in its favor—such as all the experience people have producing it, and it is known to work in many cars—it’s not perfect. That’s why bio-butanol is another fuel being developed as an alternative. Produced by engineered microbes, bio-butanol has a longer carbon chain than ethanol, helping bio-butanol absorb less water and giving it higher energy content. But bio-butanol still can work in our existing infrastructure. ❦
Types of cellulosic-ethanol opportunities include:
The investments in cellulosic ethanol are large, but the potential payoffs are huge. Producing cellulosic ethanol on a large enough scale to make a significant contribution to our fuel needs is a big challenge, but we will never know if we can reach the scale unless we try. No matter what happens, at least we will be further down the road to a cleaner and more secure future.
OPPORTUNITY 6 Solar Cookers and Barbeques
| The Market Need | Traditional cookstoves are too polluting |
| The Mission | Provide nonpolluting solar cooking in the developed and developing worlds |
| Knowledge to Start | Design, business |
| Capital Required | $ to sell; $$ to develop new products |
| Timing to Start | Weeks to months (to sell models produced by others) |
| Special Challenges |